The elaboration of the body pattern in vertebrate animals depends on call interactions, named embryonic induction, that determine many aspects of the regulation of gene expression in development. The earliest known cell interaction in, mesoderm induction, has been studied extensively in the frog Xenopus laevis. During the past several years this and other laboratories have shown that peptide growth factors of the TGF-beta, FGF and Wnt families are involved in this induction. A major molecular consequence of the action of induction factors on responsive tissue is the activation of regulatory genes. During the past year this laboratory has studied one such gene named Xlim-1. Xlim-1 belongs to a subclass of homeobox genes where the homeobox is associated with two copies of a characteristic cystein rich motif. The Xlim-1 gene is activated in late blastula by the action of activin, the TGF-beta homolog known to be a major mesoderm inducing factor. The gene is also activated by retinoic acid, a modifier of development that does not induce mesoderm, but not by FGF, an inducer of ventral mesoderm. During gastrulation the Xlim-1 gene is specifically expressed in the dorsal mesoderm, also known as the Spemann organizer. This region is important for the induction of the nervous system and the determination of the body pattern of the entire embryo. The Xlim-1 gene appears to be involved in the molecular execution of this pattern forming potential. A distinct project aims to analyze the role of RNA-binding proteins in Xenopus development. Members of a class of such proteins that contain a conserved domain called the RNA recognition motif, were cloned by a PCR based approach. Two subclasses of proteins were identified in this way in Xenopus: the core hnRNP proteins, exemplified by the Al protein (studied by another laboratory) and the A2 and A3 proteins being studied here, and a new subclass that contains a nervous -system-specific protein named nrp-1 and an ubiquitously distributed protein named xrp-1. Expression systems have been established for these proteins that are the basis for current experiments on their intracellular distribution.